Turn up the heat on the holidays

Forget about Independence Day. Start thinking about Black Friday.

If not, you could be missing out on your biggest opportunity of next season.

The holiday season starts NOW for arts managers. Don’t let the heat of summer lull you into thinking holiday shows sell themselves—there’s a lot to do. It’s time to dust off and refresh your marketing plan for The Nutcracker, A Christmas Carol, your holiday concert, or whatever hot ticket event you have this December.

In this free one-hour webinar you’ll hear from arts marketers like you who have maximized their holiday programming and gone on to break revenue records. Just when these arts administrators thought their perennial programming couldn’t garner any more, new highs were reached. These experts as well as the consultants from TRG will share the newest best practices for turning up the heat on the holidays.

Lindsay Anderson VP of Client Development

What motivates someone to attend a concert? And, more, importantly, what drives them to attend again and again? Arts managers (and patrons themselves) often cite price as the main and biggest incentive for arts attendance. Certainly price plays a major role in a customer’s decision-making process. 

But pricing doesn’t mean anything unless it’s attached to value. It’s a two-sided equation, with price on one side and demand—how much a patron wants the experience—on the other.

Luckily, you have tools that can sweeten the value proposition for your audiences. Ticketing inventory, historical data, discounting, and the choice and timing of programming can help you incentivize audiences to engage with you again and again.

This is the final video in our series on the 6 metrics that arts leaders should be tracking and managing. 

Measure What Matters: 6 Metrics Arts Leaders Should Track

Metric #6: Per capita revenue

Is your arts organization generating the most revenue it can for each event? There’s a way to measure that! In this video, Lindsay Anderson of TRG Arts explains how to figure out if your pricing strategy is causing you to lose money, and common causes of lost revenue due to pricing strategy.

92% jump in subscription packages

One marketing person. A box office director. An executive director. These positions made up the core of the administrative staff dedicated to Newman Center Presents, the performing arts presenting program of the University of Denver. Yet, this three-person team was nimble and efficient. They made small changes and, even with limited budget, saw big results.

Newman Center Presents hired TRG for a full suite assessment, focusing on pricing practices, inventory management, and season ticket campaign design.

Photo by opensource.com (CC BY-SA 2.0)

Ever read an article on pricing in the arts and wish someone could translate it into plain English? There are a lot of specialized terms to describe pricing tickets to seated events and figuring out what prices should go where in a venue.

There’s no Google Translate for pricing jargon yet, but below is a basic glossary we originally published for our recent case study with Dallas Theater Center. We recently revised the list with even more pricing terms, provided by our consulting team. If you'd like to impress your box office colleagues, make your industry friends jealous with your vocabulary, or simply confuse your significant other when you talk about pricing, read on. 

11% per capita revenue increase

The Allen Elizabethan Theatre. Featured is the set of OSF’s 2013 production of A Midsummer Night’s Dream. Photo by T. Charles Erickson.

In 2011, Oregon Shakespeare Festival (OSF) faced a crisis. During a performance of Measure for Measure in the Angus Bowmer Theatre, staff members heard an odd noise. They discovered a large crack one of the main ceiling beams in the theatre. As a result, the Angus Bowmer Theatre, one of OSF’s three venues, had to close for repair just as summer (the most in-demand time at the festival) was beginning. The marketing team decided to refund tickets if patrons did not want to attend shows in the other venues, as a part of OSF’s ongoing commitment to excellent customer service. The refunds contributed to a 27% drop in single ticket units and an 8% drop in overall admission revenue.

“Throughout the crisis, customer experience was our main concern. We based virtually every decision we made on how it would affect our patrons’ long-term relationship with OSF,” Mallory Pierce, OSF’s Director of Marketing and Communications, said.

Historically, the Oregon Shakespeare Festival was financially and organizationally strong. Sound budgeting and fiscal management procedures combined with generally strong attendance enabled the organization to grow even during the Great Recession with performances regularly sold at greater than 80% capacity.

Why subscriptions still sustain the arts and ways to rescue your subscription program 

President & CEO Jill Robinson

Thanks to everyone who attended this webinar. Click through to view slides and the recording.

Let’s face it; the subscription has been uncool for years. While disruptive technologies and changing arts consumer behavior have transformed the way arts managers see their business model, the subscription has declined and stagnated. “Subscriptions are dead” is now conventional wisdom in our industry. 

But, if subscriptions were truly dead, wouldn’t they have just disappeared by now? Inconveniently, subscriptions incentivize loyalty and provide sustainable revenue that's difficult to find elsewhere in any audience-centered business model. Many organizations that have tried to innovate in this area have found themselves in a state of subscription emergency. 

The Orpheum Theater at Omaha Performing Arts, 2014. Photo by Jodi Hauptman Drannen.

Pricing strategies can have great impact on deals and revenue for both agents and presenters. In the middle of this mix is the audience and their behavior that either creates demand for your performances, or leaves you with a lot of empty seats. Jill Robinson of TRG Arts, Jackie Knobbe of APA Agency, Jeremy Ganter of Mondavi Center, UC Davis, and Joan Squires of Omaha Performing Arts discussed the ins and outs of maximizing revenue and developing audiences through pricing and scaling in this session, presented at the 2015 APAP conference in New York City.

You may call it pricing.

We call it demand management.

The choice of words matters less than the practices arts managers maintain as part of their working discipline.

Smart technique and tactics like dynamic pricing can get you immediate infusions of income. Managing demand and its associated revenue, Jill Robinson, TRG’s President & CEO, recently told organization leaders at our July Executive Summit “is an evergreen administrative practice that must play a role in sustainable revenue.” It is a strategic skill set that can enable arts staff teams to follow patrons’ desires to deeper engagement, greater investments, and ultimately, the revenue – working capital – that helps organizations thrive.

Carmen sells out, single ticket revenue 33% above goal

Photo by Michael Duncan, featuring Audrey Babcock as Carmen, Chad Shelton as Don Jose, Anne Slovin as Frasquita, Eamon Pererya as El Remendado,   and the Pensacola Opera Chorus.

Pensacola Opera is a $1.3 million organization which stages two productions a year with two performances each. For the past several years, the company had been focused on institutional stabilization—paying off debts, completing a capital campaign for establishing cash reserves, bolstering its endowment, and making capital improvements. In the meantime, the company was having trouble consistently meeting revenue goals for their productions.

To Executive Director Erin Kelley Sammis, it was clear that the company needed to shift its attention to growing sustainable patronage and revenue. In the summer of 2013, Sammis engaged TRG for a consultancy that would begin by focusing on increasing single ticket revenue and volume. 

President & CEO Jill Robinson

Every organization has critical and very accessible database information that provides indicators of growth and sustainability. Jill Robinson, President and CEO of TRG Arts, presented TRG's most actionable Thrive Metrics at ArtsPride New Jersey's Thrive Conference at Princeton University. This presentation will tell you how to find these data points and what the research says about using data to stimulate engagement and nurture relationships with patrons. 

Want more information about the most important metrics you can study? Read Jill's recent blog post, Data that Matters: 3 Metrics to Grow Audience Relationships.

Photo via flickr

Our live chat last week with the Foundation Center (see transcript) raised an alarming question: In this time of year when patrons are thinking about us, are we thinking about our relationships with them? 

The holidays are just around the corner. Huge numbers of patrons will be seeking tickets for holiday programming and making decisions about yearend giving.

In an ideal world, arts staff teams would already be implementing strategy to forge bonds with the people they’ll interact with during the holiday peak period. One can wish, but there’s too much evidence to suggest that most marketing, development and box office teams aren’t even talking to one another. Everyone’s busy. There’s no time. Two dozen deadlines are looming. The number of reasons for not focusing here is paralyzing.

That’s why the questions we answered in real time during last week’s chat were so provocative. They reiterated the busy state of arts management today and spotlighted a looming loss: 

You’re about to miss what might be your best patron cultivation opportunity all year. 

"Pricing decision-making can be subject to emotional, political, and reactive forces within an organization," TRG's Director of Consulting Lindsay Homer said in this week's webinar on pricing. "None of these forces are productive, especially if your strategy is built on fear that your prices are too high or too low or worse yet, based on assumptions about your patrons."

The webinar, entitled "3 New Rules for Pricing Right," focused on proactive ways arts managers can manage pricing strategies based on data for best results with patrons and visitors. Director of Consulting Lindsay Homer distilled two decades of TRG's ground-breaking pricing counsel and today’s dynamic technology-driven trends into a new strategic playbook for pricing right.

Photo by Kalyan Chakravarthy via flickr

A recent You’ve Cott Mail round-up of articles about re-defining the arts experience

included a range of opinions on how art should be experienced, curated and critiqued. After it ran, a friend asked me about an area not touched upon: whether the patron experience is affected by capacity sold. 

In other words, is the audience sensitive to the fullness of the hall—and how might that affect their experience?

TRG’s take is that an individual’s experience is greatly affected by the number of people who are around them. Close proximity of patrons to other audience members (as well as to the performers) can create a powerful sense of belonging.

TRG Arts has been busy teaching this summer on the road and on the web. We’ve rounded up our most recent insights from last month below, in case you missed anything:

The Art of the Upgrade

President Jill Robinson gave a webinar hosted by Blackbaud last week about increasing patrons’ investment in and loyalty to arts organizations through upgrading.

“The best way to increase loyalty is to ask the patron to take the right next step with you. That’s what we call upgrading,” Jill said. “That right next step is different for each patron. And the right next step is informed by information in your database.”

The most recent version of this webinar is now available here.

Slides from the presentation:
 

Is your organization’s pricing strategy focused only on the cost of admission? Developed in just one department?  This 90-minute workshop, presented at the Arts Reach Canada Conference in May 2013, was designed to show leadership teams how much more there is to consider and to gain. High-impact pricing generates positive perception, improved patron loyalty, and greater revenue for every admission or seat sold.  

Photo via flickr

Some time ago I had a conversation with a theatre manager who had expressed an interest in TRG’s ticket pricing counsel.  The more we talked, the more agitated she became.  She nervously offered that her artistic director would NEVER allow pricing strategies like this happen at her theater. I, laughing, joked, “Oh my.  Your artistic director is a socialist?”  With great seriousness, she replied, “Absolutely not!  He is a communist!  He believes that every ticket should be FREE!”

The argument surrounding free and deeply discounted tickets has been around forever. The Dallas Museum of Art kicked off another round of conversation when they recently announced their decision to provide everyday free admission to everyone.  Museum memberships will also become free, with visitors actively encouraged to join using a very slick electronic system located at entry points to the museum. 

Photo via flickr

Unsupported Dynamic Pricing—a condition that exists when the results of dynamic pricing mask the broader weaknesses of an organization’s prevailing and inadequate pricing strategy.

Dynamic pricing is so simple anyone can do it, right?  When sales hit a pre-determined target point, prices for the remaining ticket inventory move up by five or ten bucks. 

Best of all, its success can be proven.  From sales reports, it’s easy to calculate a “price variance” that represents the extra money dynamic pricing generated.  And typically, there are no complaints from the ticket buying public to diminish the upside of incremental revenue. 

“Insanity: doing the same thing over and over again and expecting different results.” --Albert Einstein

Data from a registration survey for our Christmas in July webinar recently reminded me how valid and valuable Mr. Einstein’s definition is.

We had asked everyone to compare their marketing budget for last season’s holiday events with the year before. Most (76%) said they had about same amount or less to spend on holiday events – generally a sure revenue producer for arts and entertainment organizations.

We also asked them to compare their revenue expectations for holiday’s breadwinning events. And that’s where it got interesting. The majority (52%) said that they were expected to bring in more revenue.

Photo: Marja van Bochove

This article is cross-posted on Ticket News and Americans for the Arts' ARTSblog.

Harry Truman famously expressed a desire to consult only with “one-armed economists”. Our 33rd President wasn’t fond of counsel that began "On the one hand, this..." and was followed by "On the other hand, that..." Truman wanted straight talk without equivocation.

So, here is a bit of economic straight talk from the data vaults of TRG Arts. Forget everything you learned in that Econ 101 class you took in undergraduate school. You can also forget what you learned at Business School. It doesn’t apply to tickets.

London 2012 Tickets. Photo: Paul Hudson.

The eyes of the world turn to London July 27th when 10,500 athletes in 26 sports begin to compete in the Summer Games of the XXX Olympiad. 
 
The logistics surrounding the buying and selling of tickets for live Olympic events are daunting. We are talking about eight million tickets for a full range of activities from preliminary rounds to final “medal” events to opening and closing ceremonies – all crammed into a two-week window of time.

$1.1 million revenue increase 

for The Nutcracker

New York City Ballet (NYCB) was selling out most performances of the annual production of The Nutcracker, but lacked opportunity to grow Nutcracker sales and admissions because the Company was not able to add more performances. Director of Marketing Karen Girty had already built a solid marketing program, but she contracted TRG Arts in 2009 to help her find ways to maximize overall revenues, including Nutcracker.

Need to maximize revenue from The Nutcracker.

Sales were flat for The Nutcracker, which had traditionally been a staple blockbuster year after year. NYCB came to TRG with the question, “How do we make more from what we already have?”

Update: Thanks to everyone who signed up for the webinar. If you missed it, you can still view the recording here.  

Christmas in July:
Maximizing Holiday Revenue Starts Now            Date: Tuesday, July 17, 2012
Time: 2-3 p.m. EDT/11-noon PDT
Cost: Free--register here.

It’s summer—the time of year when an arts manager’s thoughts turn to poolside fun, family vacations, and—of course—planning for A Christmas Carol, The Nutcracker, yuletide concerts, and other holiday blockbuster events.

Not on your calendar yet? Then you are missing a major opportunity.

Holiday productions equal big money for arts organizations. But how can you get the most out of this once-a-year opportunity?

New York City Ballet (NYCB) wanted exactly that—to maximize revenue. The company had been selling out most of its performances of The Nutcracker. However, NYCB could not add more performances. Growth had to come from the schedule already in place.

Line to get in to Hirshhorn After Hours. Photo by Joe Loong via Flickr.

Recently I came across an excellent article entitled “Death by Curation” on how museums have developed an over-reliance on programming special exhibits, as opposed to trusting their permanent collections to make revenue goals. Author Colleen Dilenschneider makes the point that blockbusters can increase annual revenue expectations to often unreasonable levels. The blockbuster-addicted museum then sinks more money into further special exhibits that may not be as successful as the first blockbuster, or even break even.

Over two decades, we’ve seen this pattern play out in performing arts organizations, as well as museums and other membership-based attractions. Of course, the blockbusters themselves are usually not the problem. The way that an arts organization handles a blockbuster can be.

President Jill Robinson, who leads TRG's counsel for museums and membership-based organizations, explains the demand-based pricing approach that has led TRG clients to sustaining revenues and lasting patron loyalty over the last two decades. Jill makes a brief presentation on the success factors for optimizing admission revenues and then takes audience questions. 

A version of this post originally appeared as my guest commentary for Ticket News, an online resource for ticket industry news and information.

Photo by Bobby Bradley via Flickr

When it comes to pricing ticketed events, what works? For nearly two decades, TRG Arts has answered that question for hundreds of non-profit arts and culture organizations. About four years ago, TRG also began working with a number of commercial entertainment clients, mostly Broadway productions.

Photo by Glen Scott via Flickr

Museums aren’t getting useful direction from the recent public dialog about the prices they are charging or want to charge for admission.

Admission price increases at some of America’s highest profile museums have made news in major media and online, and that coverage has touched off discussion that appears more emotional than productive. It seems like the further away from free or low-cost admission a museum gets, the more the institution is vulnerable to criticism on grounds of not making their collections accessible or affordable. It’s as if admission price is the only way to express accessibility and that accessibility is the only reason for a museum’s being.

Usually when organizations consider their ticket sales, they look mainly at total revenue. After all, revenue is what keeps an organization running, and total revenue is the 50,000-foot view of how well an organization is doing.  However, when considering how to optimize ticket sales, calculating and analyzing per-capita revenue becomes a critical measurement.

Yes, “per-capita revenue” sounds boring, complex and technical, but stick with me—the reality is that it allows you to zoom in and see how tickets are selling on a season-by-season or show-by-show basis and that’s actually pretty useful.

Let’s break it down:

In laymen’s terms, per-capita revenue is the average price paid for a ticket. You can calculate per-capita revenue for an individual performance, a series of performances or an entire season. You can also break per-capita revenue out by group tickets, single tickets or subscription/membership purchases.

Ken Davenport’s insightful August 30th post spotlights the reason why advance ticket buying seems like a thing of the past.  Too many presenters, producers and arts organizations are providing incentives to buy late in the sales cycle.

As readers of this blog know, our patron behavior studies challenge the accepted conventional wisdom in the field that patrons are buying later and later.  Conventional wisdom is no substitute for fact. In a study of late-buying trends of 1.5 million arts patrons in Los Angeles, we found that buying later it is not an inevitable fact of consumer behavior. We summarized these findings earlier in the year on this blog.

In our consulting practice we do see late-buying trends, but more often than not, we’ve found that late-buying is a direct result of late-selling—not making the offer to the market early enough.  This is typically a strategy based on the assumption that all patrons want to buy late. An empty house a week out then spurs a slew of panicked late-minute discounting, or worse yet: comping. When this happens often enough, as Ken Davenport also pointed out, patrons are trained to wait for this “management panic” fire sale. The bottom line is that giving up on advance ticketing only perpetuates the cycle of late buying—and leads to less per-ticket revenue (as well as total revenue!) on an ongoing basis.

TRG Arts recently hosted a webinar detailing the $3 million success story of Vancouver’s Arts Club Theatre Company. The Q & A discussion was quite robust, and from it, I caught a glimpse of the wide range of responses and questions arts managers have on pricing and patron loyalty.

One of the most interesting questions was raised on the periphery by two different attendees: Why should subscribers get discounts and more importantly, why should we give discounts on the best seats in the house? Since we didn’t have time in the webinar to address this specific question, I sat down to get Rick’s perspective. This post features the highlights from our conversation.

Subscriptions prices should drive demand and reward loyalty.

As I was reviewing data for this post, two significant contributions to the national dialogue on arts and culture sparked a lot of online discussion. The publication of the National Arts Index by Americans for the Arts and comments made by NEA chairman Rocco Landesman raised compelling questions about the nature of supply of and demand for arts organizations, arts venues, and forms of expression. The consumer trends we see in transaction data offer additional perspective to consider on the demand side of this ongoing conversation, which is provocative and timely. We hope it will continue. 

When I was a new young marketing director, my boss at the Cincinnati Symphony Orchestra began my orientation with a number of helpful observations about the new job and the field I was about to enter. One key ‘fact’ really pulled me up short. The target market for a symphony orchestra, Managing Director Steve Monder stated, was very different than my prior experiences as a marketer in the theme park industry. Supporters of the typical symphony orchestra accounted for no more than 2% to 3% of the population in any community. To succeed as a new marketing director, I would have to quickly learn an entirely new skill set. I would have to efficiently find a very small target market.  

Blogger’s Note: It’s been a long time, several thousand travel miles, two conferences, a first draft of a new book, and two new grandchildren since my last blog entry. During that time, I’ve seen case and study results that I’ll share via this and future posts. Here’s to a happy, more prosperous, more communicative New Year.

Recently, a very smart entrepreneur in the commercial entertainment industry made a surprising observation. He admitted that he carefully follows the business and marketing practices of not-for-profit arts and culture organizations. Nonprofits, he said, tend to “work smarter -- they have to.” Strategies born of necessity frequently breed cutting-edge ideas that can be applied elsewhere. 

I would agree. In these tough times, the margin for error is so small and the stakes so high that survival for many nonprofit performing arts organizations depends upon the ability to do everything exactly right. 

So when client organizations began posting higher ticket sales in late 2010, we took notice. We also took a closer look to understand what was happening. What were the forces that appeared to drive sales up – or down? Were there organizational or market factors at work? If so, what lessons might we learn?